10 Secrets for The First Time Homebuyer

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Are you a first-time homebuyer?
We'll let you in on a few secrets...

1. Breaking up with your landlord can save thousands. By the year’s end, you’ve probably paid the landlord $10,000+, and you may be facing a rent increase for next year.

There are benefits to breaking up with your landlord. Rent payments go straight into the pocket of the landlord – every month. By the time the holidays roll around each year you’ve probably paid the landlord $10,000+, and you have nothing to show for it. Rent can also go up drastically, sometimes with little warning. If you want more predictable housing costs and security, it might be time to write the “Dear John” letter to your landlord. Start out with confidence by enrolling in @eHome America’s online Homebuyer Education.

2. You have the opportunity to pay less to the banker. A $200k 30-year mortgage at 5% (instead of 4%) will cost you an extra $43k.

You have the opportunity to pay much less in interest. Ask anyone who bought a house before you were born what their mortgage interest rate was, and you’ll hear responses from 8% to 18% (yes, those who bought in 1981 could pay more than $1,000 a month in interest alone for a modest home.) When rates do move higher, it’ll cost tens of thousands of dollars more to buy the same home. And refinancing to a lower rate may not happen because rates will likely never be this low again.

3. Uncle Sam has a deal for you. Really. Deducting mortgage interest can save you thousands in income taxes – every year.

Uncle Sam has a deal for you. Really. Mortgage interest paid is deductible using 1040 Schedule A. For example 4% on a $200,000 mortgage equals $8,000 interest that you pay – which, in most cases, saves you at least $1,500 in federal income taxes – every year.

4. Homeownership has benefits beyond your wallet. Children growing up in a home are much more likely to graduate college and buy a home.

Homeownership has benefits beyond your finances. Homeowners are more likely to be invested in the local community and form friendships that create belonging and value, compared to renters. Research is also clear that, when compared to renter households, children are 116% more likely to graduate from college and 59% more likely to own a home within ten years of moving from their parent’s household.
Source: http://www.habitatsa.org/about/benefits.aspx

5. The majority of buyers put LESS than 20% down when purchasing their first home.

You don’t need 20% for your down payment. For first time buyers with modest to average incomes, there are programs that provide down payment funds that come to you as a gift or a deferred, 0% loan. There are also mortgages that only require 5% down. In many communities, these programs can be accessed by households making as much as $90,000 a year and for home purchases of $300,000 or less. (Keep in mind if your down payment is less than 20%, you’ll need private mortgage insurance, which will add to your monthly payment.)

6. When it comes to creating a true home, neighborhoods are as important as the house.

Walk the neighborhood and talk to the neighbors before buying. Get a sense of the community by walking or biking it at different times and days of the week. How’s the traffic at rush hour? Do you notice air or rail noise? Where are the schools, shops, and retail hubs? Is there a community garden in the area? Are there trails and sidewalks to make getting that baby stroller to park safe and smooth?

7. One-third of millennial buyers are single women.

You don’t have to be married or have a dual income household to afford a home. Using nonprofit resources and community programs can provide down payment dollars, access to special products, and even training on home maintenance. Today, single women buyers make up 1/3 of all sales – buying, on average, at age 30.Source: TD Bank Survey 2016

8. More than half of millennial buyers use a mortgage affordability program or product. Find your local options now.

You'll need thousands of dollars for your down payment which is why many buyers turn to affordability programs in their community. Nationwide there are 1,500+ down payment programs, and qualified home buyers typically receive $5,000 or more! (ideally, link to eHome America’s DPR carrot work flow landing page, but if not available yet go with http://downpaymentresource.com/are-you-eligible/)

9. Many Millennials say that finding the right house is their biggest challenge.

Many Millennials say that finding the right house is their biggest challenge. Don’t despair: there are home options for every situation and taste. In many markets, the variety of housing stock is better than ever. All sizes, new or fully remodeled, near public transit, walkable, duplex or condo, even new “greenbuilds” with high efficiency appliances and solar features. Some come with federal or local incentives, including those where a nonprofit developer played a part. Once you decide what you want, you’re likely to find a home that fits your values and lifestyle.

10. Millennials are using online courses to earn high-value first-time homebuyer incentives.

Most first time mortgage products and down payment assistance funds require homebuyer education from a certified nonprofit. Increasingly buyers are saving time and money, and learning online at their own pace, even from a mobile device. You come away with a better understanding of your credit, mortgage terms and products, and how to stay on track financially after you move in. Register today at www.ehomeamerica.org

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